Ford: We have those arrangements now. I don’t think it’s extremely differentiated that you’re saying to a customer, “Listen. If you don’t get this outcome, I’ll give you, say, 45% of the cost back.” It’s interesting. Everybody uses the same 45% back. There’s a reason why. I think some hospitals see value to that. Some of them are saying, “Well, yeah, but I still have to arrange another procedure.” I think that that’s being done, but I think from a differentiation standpoint on that value-add, I think there are other elements that will be important here.

The multiline contracting is one, but I think you do need to surround disease states with a service and a value proposition that goes just beyond, “Hey, I’ve got this great device that all of your implanters and surgeons really want to use.” A good example of that is in heart failure – the way it’s been assembled at St. Jude is an understanding that you need to go beyond just the therapy devices, whether it’s a CRT-D, whether it’s a MitraClip on our side, or an LVAD, you need to also have a diagnostic element to it. I think CardioMEMS is going to be an important part of that.

The other part of the heart failure, though, is to be able to bring in value-add services to the heart-failure center. It’s a huge cost to them, to the hospital systems, and they’re looking for more than just the product or just the diagnostic. A lot of these devices collect a lot of data. There are opportunities there to be able to use some of that information to generate insights and provide better, let’s say, service to that heart failure center, so as to better manage their costs, better manage the patients. That’s the kind of example and thinking that we need to have. I think if you go across a couple of the businesses, there are opportunities to do that.

Abbott's Robert Ford: Device Chief Looks Ahead After St. Jude Deal

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